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Sequester Hysteria

Posted By Arnold Ahlert On February 19, 2013 @ 12:50 am In Daily Mailer,FrontPage | 14 Comments

Obama administration and Democrat hysterics are once again out in force. Coordinating with their media propaganda pushers, they are attempting to convince the American public that “sequestration,” as in the mandatory spending cuts engendered by the budget ceiling debacle of 2011, amount to nothing less than economic Armageddon. “Sequester is a blunt and indiscriminate instrument that poses a serious threat to our national security, domestic priorities and the economy,” said Danny Werfel, a senior official at the White House budget office, to reporters at a briefing.

While deep defense cuts should be reasonably feared, in other areas, the Democrats’ claim is utterly hyperbolic. In FY2013, the sequester would result in cuts totaling $85 billion. According to the Congressional Budget Office (CBO), federal spending for 2012, excluding certain credit adjustments for items such as the Troubled Asset Relief Program (TARP), was $3.5 trillion. Assuming federal spending would stay completely flat, such a “massive” spending cut would comprise 2.4 percent of the 2013 budget. For perspective’s sake, as well as a good indication that flat federal spending is an elusive reality, it should be noted that Congress recently authorized a total of $60.2 billion in additional deficit spending for Hurricane Sandy relief.

Or more accurately, Congress authorized another unconscionable pork-fest that included relief for Hurricane Sandy. It also included billions of dollars for such items as FBI salaries, $2 billion for road construction across the country, funding for the Head Start program, roof repairs at the Smithsonian, $4 million for the Kennedy Space Center in Florida, $50 million for the National Park Service–and $16 billion for usage by 47 states to underwrite past and future events from 2011 through 2013. As of now, none of that spending has been offset by any cuts in other programs. In other words, even as the hysterics wax spasmodic about “gargantuan” cuts, Congress has just spent another $60.2 billion–meaning that even if the entire $85 billion in cuts for 2013 go into effect as scheduled, spending for this year will be reduced by all of $24.8 billion.

The long-term spending reductions are equally un-cataclysmic, especially when compared to the amount of deficit spending in which this administration has engaged. The entire amount of the spending cuts engendered by sequestration total $1.2 trillion–over ten years. Compare that to the deficits this administration has run over the last four years: in FY2009, the federal deficit was $1.4 trillion; in FY2010 it was $1.293 trillion;  FY2011 totaled $1.3 trillion;  and in FY2012, federal spending exceeded revenues by $1.089 trillion. That comes to more than $5 trillion of debt accumulated in just four years–on the books.

Off the book federal obligations, better known as “unfunded liabilities,” are almost incomprehensible. Americans get testy when they think of a federal government more than $16 trillion in debt. Yet America’s actual debt is $86.8 trillion, or 550% of GDP, when one counts all of the revenue the government needs to fund Social Security, Medicare, and federal employees’ future retirement benefits at the current time. In other words, sequestration is akin to subtracting a single grain of sand from a Sahara Desert of debt.

Now one would think that historically unprecedented levels of deficits and debt would chasten the president and the spendthrifts in the Democratic Party. One would be completely and utterly wrong. In his State of the Union speech, Obama flat out lied about sequestration. “In 2011, Congress passed a law saying that if both parties couldn’t agree on a plan to reach our deficit goal, about a trillion dollars’ worth of budget cuts would automatically go into effect this year.” We already know that only $85 billion will be cut this year.

Yet he compounded that lie by doing what he does best, namely, stoking fear. “These sudden, harsh, arbitrary cuts would jeopardize our military readiness, they’d devastate priorities like education and energy and medical research. They would certainly slow our recovery and cost us hundreds of thousands of jobs. And that’s why Democrats, Republicans, business leaders, and economists have already said that these cuts — known here in Washington as ‘the sequester’–are a really bad idea.”

Which brings us to something most Americans don’t know: sequestration was Barack Obama’s “bad idea.” Washington Post journalist Bob Woodward, who became famous when he uncovered the Watergate scandal, wrote a book chronicling eighteen months of efforts by leaders in both parties to revitalize the American economy. According to Woodward, former White House chief of staff Jack Lew brought up sequestration on behalf of the president. Even the left-leaning Washington Post “fact-checked” Obama’s claim that Congress “proposed” the sequester, and gave it their “whopper” rating of Four Pinocchios, the highest level of mendacity on the scale.

Obama proposed the sequester because he was certain that Republicans would fold, due to the reality that fifty percent of the cuts come from the military. This confidence was no doubt compounded by the reality that the so-called cuts to entitlement programs completely exempted Social Security, Medicaid, the Children’s Health Insurance Program, food stamps, Supplemental Security Income (SSI), refundable tax credits, veterans’ compensation, and federal retirement, even as it imposed cuts on Medicare providers.

Unfortunately for the president and his party, Republicans haven’t folded for three reasons. One, they gave into Obama on the fiscal cliff deal and allowed taxes to be raised. As of now, they are not prepared to accept any further tax hikes to “offset” the impending cuts.

Two, a large number of Republicans believe that the only way to get any serious spending cuts is to accept that they will include cuts to military spending. Rep. Mick Mulvaney (R-SC), for instance, explained to Politico that if Republicans “don’t take defense spending seriously, it undermines our credibility on other spending issues. When we speak candidly about a spending problem and we then seek to puff up the defense budget and (sic) it leads people to believe that we aren’t taking the problem seriously.”

Yet it is the third reason that likely animates Republicans the most. Since the cuts are automatic, they don’t have to negotiate with a duplicitous president, hector Senate Democrats to pass a budget for the first time in almost four years, or have yet another House budget proposal submitted to the Senate routinely dismissed. They merely have to sit back and do…nothing.

Thus, the proverbial ball is back in the administration’s court. And with an ample assist from the media, Democrats and administration officials have embarked on a blitzkrieg campaign best described as a combination of Orwellian denial, and shameless fear-mongering.  With regard to the former strategy, a number of prominent Democrats are suddenly promoting the idea that America doesn’t have a spending problem at all. That’s reportedly what President Obama told John Boehner. Nancy Pelosi (D-CA) echoed that contention, saying we don’t have a “spending problem,” but a “priority problem.” House Minority Whip Steny Hoyer (D-MD) mysteriously concluded that America doesn’t have a spending problem, but a “paying-for problem.” And Sen. Tom Harkin (D-IA) has decided that the real problem isn’t spending, but a “misallocation of capital, a misallocation of wealth.” In other words, as far as Harkin is concerned, government’s chief function is to pick winners and losers in the private sector, and then decide how much wealth is too much for the winners to amass.

As bad as these efforts to deny reality are, they pale in comparison to the implementation of the latter strategy, as in the onslaught of fear-mongering this administration has engendered. The White House has published a “fact” sheet that is a laundry list of doom-and-gloom Americans would be forced to endure if the sequester occurs. Itemized entries include kicking kids out of Head Start (despite the Head Start funding contained in the Sandy spending package), as well as leaving Americans vulnerable to food poisoning, crime, disease, a lack of emergency responders, untreated mental health patients, interruptions in meals and/or nutrition programs for seniors, women, infants and children, and a host of other calamities that will befall the nation if such “massive cuts”–amounting to all of about one half of one percent of GDP–kick in.

Yet the most despicable example of ginning up unnecessary fear was revealed by the Washington Times on Valentine’s Day. The Obama administration is claiming that if the sequester happens, furloughs for food inspectors would cause shutdowns of meat-processing plants. As a result, more than 2 billion pounds of beef and pork, and more than 3 billion pounds of poultry will never make it to market, precipitating shortages and price spikes. The implication is clear: either Republicans cave to our demands, or they will be blamed for forcing Americans to embrace a vegetarian lifestyle!

Such threats are completely unsurprising. Behind the facade of hope and change this administration and its media cheerleaders promote lives the extortionist “never let a crisis go to waste” mentality that truly animates those for whom such thuggish, “Chicago-style” tactics are considered business as usual. After four years and two victorious elections, Barack Obama remains, at heart, not a president, but a community organizer completely comfortable with the politics of demonization, division and fear.

Again, as Americans contemplate the “devastation” that will supposedly befall us, the Wall Street Journal reminds us that perspective is everything. “Fear not,” they write. “As always in Washington when there is talk of cutting spending, most of the hysteria is baseless….In Mr. Obama’s first two years, while private businesses and households were spending less and deleveraging, federal domestic discretionary spending soared by 84% with some agencies doubling and tripling their budgets” (italic mine).

One last thing. More Americans need to become familiar with the concept of baseline budgeting. In simple terms, if an agency’s budget is $100, and they are expecting an increase of $10.00 next year, but they only get $8.00, politicians characterize that as a $2.00 cut in spending. Concerning the entire $1.2 trillion in “cuts” engendered by the sequester, it must be understood that they are not really cuts at all. They are really a lowering of the projected increase in federal spending going forward. The CBO cuts through the fog. “For the 2014–2023 period, deficits in CBO’s baseline projections total $7.0 trillion. With such deficits, federal debt would remain above 73 percent of GDP–far higher than the 39 percent average seen over the past four decades,” it reports.

Thus, over the next decade, we are “cutting” our way to adding another $7 trillion of debt to the $16-plus trillion we have already amassed. As far as the administration, Democrats and their media enablers are concerned, any attempt to mitigate that “paying-for problem” will turn America into a Third World nation of vegetable eaters. Yet the simple truth remains inarguable: absent the genuine entitlement reform critically necessary to get our spending under control, we are headed for national bankruptcy. At that point, even vegetables may be a luxury item.

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